Whether you are a business owner or an auditor, the year-end compliance is always a nightmare. Business owners have to prepare a mountain of papers to be sent in for audit, while auditors have to select the right documents of countless clients and attach those to the corresponding workpapers. And if even a single thing goes wrong, the working paper will contain grave mistakes, resulting in both the business and the auditor receiving a serious fine from authorities.
But there will be no errors if both parties use online accounting software with which all the hassle of creating workpapers is eliminated in an instant.
Why Is It Good for Me?
It doesn’t matter if you use a third party program or you and your client utilize the same solution, workpaper management has never been easier than with the use of accounting software. As in the case with most online solutions the key term here is ‘the cloud’, the virtual storage that ensures continuous data flow between clients and auditors. This is beneficial for both parties: an auditor can work in peace, simply sending out queries to clients or fetching the necessary data straight from the client’s account if more information is needed, while business owners can enjoy hassle-free audits and focus on running their businesses.
How Does It Work?
While we’ve based the following on our understanding of Xero’s solution, Workpapers, the following features are all typically available in any online accounting software capable of handling working papers (e.g. Sage’s Workpapers).
Xero Workpapers Introduction
Online accounting solutions let you easily create new working paper packs and immediately associate it with a client; however, these workpaper packs can be reviewed, updated and archived with just a few clicks, too. Additionally, accounting software allows you to choose from various financial years to be included in the working paper, but you still have the option to reduce the time period to your liking, creating monthly, quarterly or semi-annual workpapers as well.
This way there are no more debates on who should be working on a certain workpaper either: the admins in software like Xero’s Workpapers are able to assign tasks to co-workers and even set deadlines to the project. They can also decide the roles of co-workers, determining what they can see in their very own account.
We briefly touched upon the subject of continuous data flow; this, in the case of workpapers, is manifested in the option to import all client information your workpaper needs to include. With just a single click the client’s trial balance appears on your end, while the auditor assigned to the relevant working paper can update the report codes or start working on individual items that have also been imported from the client’s account.
Since workpapers usually consist of multiple documents, it is more than obvious that accounting software should let you review those items one by one. This way it is ensured that the auditor can check the validity of the numbers and, in case of an error, can act by gathering the necessary documents directly from the client’s own account or by leaving a query.
Sending out a query to the client (by email) is the optimal way of acquiring missing information or documents. To make things even better, these email queries contain links that, by clicking on them, will allow the query to be immediately answered, even providing the option for clients to upload the necessary documents directly into the workpaper pack.
Queries work internally, too: you can post questions or notes to each working paper, thus asking for the help of your colleagues or the manager of the account.
Although online accounting solutions sport many stellar features, it is mobility that is usually the most in demand by users. Thankfully that same feature is available for workpapers as well: since everything is stored in the cloud all you need is an internet browser to access the workpapers and start working on them. But if you prefer or need to work on the go you can easily get the job done via the chosen accounting software’s dedicated app.